Efficiency of Operational Management at Amazon

Armstrong & Stephens (2005, p.113) explains operations management as the process that involves the carrying out of the activities relating to ordering, handling, processing and distributing the goods and services to the ultimate consumer. In regards to the importance of operations management Sanders (2014) states that it is necessary for managing the operations of a business, which further helps in controlling costs, reducing the waste in the ordering process and managing the suppliers of the business efficiently.

As discussed above that Amazon is a leading global online retailer that is currently providing platform to its customers to purchase their desired products in god quality and affordable prices. Amazon has gained tremendous growth and has also created a well known name for itself in the online retail industry by providing buyers a platform where they can get high quality good at competitive prices.
Armstrong & Stephens (2005) was of the view that Amazon has been using the most advanced technology for managing its operations in an efficient manner. Furthermore the use of advanced technology like software’s has helped the company in handling goods and services to its ultimate consumers. According to Chary (2009) effective operations management is directly linked with the ultimate objectives of the company and if the operations of a company are not implemented in a proper way then it will surely affect the profitability of the company in long-run. Hence in order to attain these objectives it is necessary that the operations of the business are handled by the operations manager in an efficient manner.
Operations management handles the processes associated with planning and supervision of the products, services, procedures and supply chain of a company (Kachru 2009). Moreover it deals with the resources that are required by the company for bringing their products or services according to the needs of the ultimate customers. Chary (2009) explained that operations management is the process that transforms a set of resources into finished products or services (Figure 1). Kachru (2009) explained that in operations management the resources like competencies of the employees, raw materials and machinery are the input, while distribution of goods and services to the consumers are the output. Kachru (2009) further explained that apart for input and output there are some other functions of operations management as well like, quality management, controlling the management, managing the facilities, inventory control, research and development and finance function.

Chary (2009) states that in operations management the quality management is essential and the organisations like Amazon should always concentrate on fulfilling the needs of the consumers while providing them their desired quality as the needs of the consumers are directly linked to the development of the product. Kachru (2009) explained that Amazon has been continuously focusing on its efforts to improve the quality of its services even better and their continuous investment in their research and development is the major reason behind their success. In order to manage its operations efficiently Amazon has been making great use of advancements in the technology.

Moreover the company follows three main stages in order to ensure efficiency in its operations and these three operations are order processing, warehouse operations and transportation (Fig 1). Amazon uses the most advanced technology in order to deliver what their customers expect from them (TIME 2014). In this regard TIME (2014) further stated that the overall wealth of data of Amazon on online suppliers and shoppers has been inspiring most of the other businesses on how big data technologies can reshape their life on internet and beyond. Moreover the company is also using the most advanced software for keeping the track of the orders which further help them in monitoring the progress of the order placed by the buyer with the supplier and this further includes all of the details regarding the shipment and the way the ordered goods are delivered.

The use of advanced technology further helps Amazon in keeping the records of the registered suppliers and buyers as well, which further present them a chance to directly communicate the delivery time to the buyers while taking order. Moreover it also has the ability to give warnings if the dispatch date do not coincide with the tolerance period and further the system will also report to operational manager so that he or she could take the action before hand.
According to Tam (2014) the major strength of Amazon is its ability to offer buyers high quality products, while reducing its operational costs. The major advantage to Amazon is that it is a company owned brand and the management of the company takes the decisions and has more control over its management and decisions (Tam 2014).


Armstrong, M and Stephens, T. (2005). A Handbook of Management and Leadership: A
Guide to Managing for Results, Kogan Page Publishers, pp: 113

Chary. (2009). Production and operations management, Tata McGraw-Hill Education.

Kachru, U. (2009). Production & Operations Management, Excel Books India.

Sanders, N. (2014). Operations Management Defined, Financial Times Press.4
Tam, D. (2014). Meet Amazon's busiest employee — the Kiva robot, Available online at:
http://www.cnet.com/news/meet-amazons-busiest-employee-the-kiva-robot/ [Accessed on

TIME (2014). Meet the Robots Shipping Your Amazon Orders, Available online at:
http://time.com/3605924/amazon-robots/ [Accessed on 27/12/2018].

1 Comment on "Efficiency of Operational Management at Amazon"

  1. appears to be interesting.i have not found many articles that use references to back their thoughts / facts or figures and use of theories is also interesting….

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